A Korean-American couple with a home in New York and an apartment in South Korea created an estate plan that combined a living trust and QDOT to avoid probate and minimize their estate tax liability.

Client background

  • Family organization: Husband (U.S. citizen), wife (permanent resident), 2 adult children
  • U.S. assets: Queens Own Home ($1.2M), Retirement Account ($400K), Life Insurance ($500K)
  • South Korea Assets: Seoul apartment (market value of 800 million won), Korean bank deposits
  • Total assets: Approx. $2.7M

Key challenges

  • My wife is a permanent resident (non-citizen), so the Unlimited Marital Deduction doesn't apply to her
  • Risk of double taxation due to assets in both the U.S. and Korea
  • I want to avoid probate proceedings
  • You want to pass assets to your children efficiently

Succession planning by design

  1. Revocable living trusts Avoid Probate by Transferring U.S. Home and Financial Assets into Trust Name
  2. Qualified Domestic Trust (QDOT) Setting up a QDOT for my wife, a non-citizen spouse - deferring estate taxes during her lifetime
  3. Pour-Over Will: Transferring assets not included in a trust to a posthumous trust
  4. Power of Attorney + Healthcare Directive Designate property management and health care decisions in case of incapacity
  5. Korea Asset Separation Plan Prevent double taxation by creating separate wills under Korean law and utilizing the Korea-US tax treaty

Result

  • Probate avoidance Major assets in the U.S. transferred to the trust, eliminating post-mortem probate proceedings
  • Estate tax deferral: QDOT allows you to defer paying estate taxes if your wife survives you
  • Avoid double taxation: Strategizing for foreign tax credits under the U.S.-Korea tax treaty
  • Family peace of mind Prevent family disputes with a clear estate plan

Key takeaways

For Korean-American families with assets in both the U.S. and Korea, a simple will is not enough - especially if you have a non-citizen spouse - without a QDOT, you could be immediately subject to estate taxes and forced to sell your home. Advance planning protects your family's wealth.

* Initials and some details have been changed to protect the client's privacy.

Phone: (718) 353-2699 | Email: jd@choattorneys.com

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